A decision-making tool for the evaluation and selection of Project Management Information System (PMIS) Software

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i

Final year Project: Final Report

A Decision-making tool for the

evaluation and selection of Project

Management Information System

(PMIS) Software

Project by:

Ona Rautenbach

15363414

Under Supervision of:

Prof C.S.L. Schutte

2011/10/03

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ii

Acknowledgements

I would like to thank the following people for contributing towards a successful project:

• Prof C.S.L. Schutte, for guidance in the execution of the project and encouragement to make independent decisions and broaden my thinking

• Liezl van Dyk, for kindly helping with questions on Analytic Hierarchy Process (AHP) methods and overall motivation

• Pierre Rautenbach & Christine Rautenbach, my parents, for the opportunity to study at the University of Stellenbosch and the support and encouragement during the long working hours

• Dempers Meyer, for company on the late nights and weekends spent working, for insight, encouragement and emotional support

• The Schoombee’s for providing accommodation and support during the vacation

• My friends and classmates for encouragement and understanding

• Finally, all honour to my Heavenly Father for critical breakthroughs, insight, and much needed rest in pressing times

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Declaration

I, the undersigned, hereby declare that the work contained in this final year project is my own original work and that I have not previously in its entirety or in part submitted it at any university for a degree.

………. ………

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ECSA Exit Level Outcomes Reference

The following table includes references to sections in this report where ECSA exit level outcomes are addressed.

Exit level outcome Section(s)

Relevant Tools

1. Problem Solving 1, pp.1-3 - Development of a problem solving methodology

5. Engineering

Methods, Skills & Tools including Information Technology 2, pp.6 -9 3, pp.10-20 4, pp.26-36 Appendix B - Information systems

- PMBoK areas of knowledge (Project Management) - Analytic Hierarchy Process (Operations Research)

- Excel Visual Basic programming (Industrial Programming)

6. Professional and Technical

communication

Entire document The technical content of this project is communicated

professionally in this document as well as at an oral presentation

9. Independent

learning ability 2,pp. 4-24

4,p p.26-36 & Appendix A

- Performing a literature study

- Analytic Hierarchy Process (AHP) methods were not covered in detail in Operations Research and had to be investigated & understood independently

10. Engineering

professionalism Entire report - A thorough explanation of why choices were made _{is provided at all stages}

- Areas for improvement are identified in situations where decision-making and design fall beyond current competence

Research the Project Managment Environment and Management Information Systems

Define the criteria necessary in evaluating and selecting a PMIS

Document the Decision- making Tool

Expert opinion and

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Abstract

The use of a Project Management Information System (PMIS) provides many benefits to organizations involved in project work. These systems can be seen as information managers that integrate and control information flows to assist management in gaining an overview of past and present events, as well as enable them to make future predictions. However, with organizational needs varying, and features provided by these systems covering different project management areas, finding the correct fit between the organization and the most comprehensive system is difficult. The vast amount of evaluation criteria, and the variety of software packages on the market, further complicates the problem.

This report addresses this problem by developing a decision-making tool based on multi-criteria decision-making methods, more specifically, the Analytic Hierarchy Process (AHP). A structured development methodology was followed to develop the tool. It includes the initial attainment of knowledge of the Project management, and management information system environments. Next the criteria on which the model would be based was selected from these environments in terms of functional-, organizational-, and software acquisition requirements, resulting in fourteen specific criterions. The final decision-making tool was then developed by utilizing the AHP methods as well as Visual Basic programming in Excel. The criteria were structured in a hierarchy, and alternatives were measured against each of these criterions to obtain a weighted rank of the alternatives.

The final result can be seen as an easy-to-use tool that covers a comprehensive range of decision-making criteria. The tool can be used in collaboration with other methods to aid users in PMIS software selection. An evaluation of the tool by experts confirmed that the tool could be used successfully in the project management environment, provided some adjustments are made. The valued opinion of these experts and the entire development process was document to allow future expansions and improvements.

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vi

Opsomming

Projekbestuur-inligtingstelsels word gereeld in maatskappye gebruik wat projekte uitvoer. Hierdie stelsels voeg waarde tot die maatskappy se aktiwiteite deur die vloei van inligting beide te integreer en te beheer. Die gestruktureerde vloei van inligting, stel die bestuur van die maatskappy in staat om ‘n oorsig te verkry van die huidige en geskiedkundige stand van sake en ook om vooruitskattings te kan maak.

Maatskappye se behoeftes verskil, en daarmee saam verskil die spesifikasies van die projekbestuur-inligtingstelsels. Daar is ook so ’n wye verskeidenheid stelsels op die mark, dat die besluit om die regte stelsel vir ’n spesifieke maatskappy te kies baie, kompleks is. Hierdie verslag spreek die komplekse probleme aan, deur die ontwikkeling van ’n besluitnemingsinstrument wat ‘n verkeidenheid kriteria in ag kan neem. Die instrument is gebasseer op die Analitiese Hiërargiese Proses (AHP) metode. ’n Metodologie is gevolg gedurende die ontwikkeling van die instrument, wat eerstens bestaan uit deeglike navorsing oor die projekbestuur omgewing en bestuurs-inligtingstelsels. Na dié kennis bekom is, kon daar veertien spesifieke kriteria geїdentifiseer word uit hierdie twee omgewings – funksionele-, organisatoriese-, en sagteware aankoop kriteria. Uiteindelik kon hierdie kriteria in ’n hiërargie geplaas word, waarna die AHP metode en “Visual Basic” programmering daarop toegepas is om verskeie alternatiewe teen mekaar op te weeg.

Die eindproduk kan beskou word as ’n gebruikersvriendelike instrument wat ’n omvattende reeks besluitnemingskriteira in ag neem. Die instrument kan in samewerking met ander metodes gebruik word om projekbestuurders met die besluitnemingsproses te help. Die instrument is uiteindelik deur kenners uit die projekbestuur omgewing geëvalueer en die gevolgtrekking was dat die instrument wel in die industrie gebruik sal kan word, gegewe ’n paar veranderinge. Hierdie moontlike veranderinge en ander waardevolle insigte van die kenner, asook die hele ontwikkelingsproses, is vasgelê in die verslag. Sodoende sal toekomstige uitbreidings en verbeteringe maklik aangebring kan word.

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List of Figures

Figure 1 - Decision-making tool development methodology ... 2

Figure 2 - First phase of Decision-making tool development ... 4

Figure 3 - Project Management Process groups ... 5

Figure 4 - Second phase of Decision-making tool development ... 10

Figure 5 - Nine PMBoK Knowledge areas ... 12

Figure 6 - Davis's Technology Acceptance Model (TAM) ... 21

Figure 7 - Actual cost of equipment for wireless connectivity ... 23

Figure 8 - Total Cost of Ownership (TCO) ... 24

Figure 9 - Third phase of decision-making tool development ... 26

Figure 10 -AHP comparisons to select PMIS software ... 28

Figure 11 - Decision-making tool (HOME interface) ... 30

Figure 12 - Evaluate Criteria userform ... 31

Figure 13 –Decision-making tool (HOME interface 2) ... 32

Figure 14 - Userform tab for Initializing Alternatives ... 32

Figure 15 - Evaluation of six alternatives in term of Criteria 1 ... 33

Figure 16 - Decision-making tool (HOME interface 3) ... 35

Figure 17 - Summary of results of the sotware evaluation process performed by AHP ... 35

Figure 18 - Summary of results obtained from expert evaluation ... 39

Figure 19 - HOME screen of Decision-making tool ... 54

Figure 20 - Instructions screen of Decision-making tool ... 54

Figure 21 - Evaluation of Criteria ... 55

Figure 22 - Visual Basic coding for completion of matrix ... 56

Figure 23 - Initialize Alternatives ... 57

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List of Tables

Table 1 - PMIS's currently available ... 9

Table 2 - PMBOK compared to PRINCE 2 Project management methodologies ... 11

Table 3 - PMBOK knowledge areas and processes ... 13

Table 4 - The Saaty rating Scale ... 29

Table 5 – An example of a Pairwise comparison of the fourteen criteria ... 29

Table 7 - Evaluation matrix of six alternatives in terms of Criteria 1 ... 33

Table 8 - Columns of alternative capabilities relative to criteria ... 34

Table 9 - Consistency Ratio matrix to determine λmax ... 37

Table 10 - Saaty's Random Index for different size matrices ... 37

Table 11 - Summary of Expert rating of six alternatives ... 38

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Glossary

AHP Analytic Hierarchy process ANP Analytic Network Process

IS Information System

MIS Management Information system PMI Project Management Institute

PMIS Project Management Information System TAM Technology Acceptance Model

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1. Introduction

The PMIS is an all-encompassing system that is increasingly being used in a variety of industries to aid companies and project managers in successfully completing tasks and projects. These systems have a variety of functions and can be utilized in all areas of an organization, from financial management to the flow of physical materials. It directs the collection, control and distribution of information flows in an organization to ensure everyone involved is up to date with the current standing of projects etc. It can also be used to predict future situations by exploiting information from previous projects.

The software market is currently flooded with a variety of PMIS packages, each claiming to be the answer to all of the information flow needs of an organization (Wei et. al, 2004:161). There are commercial off-the-shelf packages, web-based packages as well as packages designed to customer specifications. The different alternatives present both pros and cons, and it is up to the organization to decide which alternative to choose. Organizations often don’t know what factors to look for in a PMIS package, and may choose a package not well suited to the organization’s needs. This wrong choice together with a lack of training and other factors lead to the sub-optimal use of the specific package. As a result, there has been an overall negative attitude towards the implementation of PMIS software packages in the industry. This is a disappointment as the use of these systems could improve both the organization’s day-to-day tasks as well as long-term decisions. The potential for PMIS’s are clearly not being exploited (Ahlemann, 2009:19).

This report is concerned with the complex decision-making process involved in selecting the most comprehensive PMIS package for a specific organization. A tool has been developed to aid project managers in this regard. Analytic Hierarchy Process (AHP), which involves pairwise comparisons, was utilized to create an easy-to-use tool. This tool should be used in conjunction with other tools for optimal results. The method used in developing this tool will be outlined below and discussed in detail in the sections to come.

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Research the Project Managment Environment and

Management Information Systems

Define the criteria necessary in

evaluating and selecting a PMIS

Document the Decision-

making Tool

Figure 1 - Decision-making tool development methodology

1.1 Methodology used in developing the Decision-making tool

A thorough literature study was done on the project management environment as well as on management information systems as these aspects form the basis of the PMIS. The nature of information flows, especially those in the project environment, needed to be understood to define exactly what the role of the PMIS is and to ensure that all aspects would be taken into account when developing the final decision-making tool. Gaining a broad overview of the field made it possible to make essential decisions on the criteria that would describe a comprehensive PMIS.

The main criteria identified as important in evaluating and selecting a comprehensive PMIS were technical requirements, organizational requirements, as well as the software acquisition requirements of the organization. The literature provides accounts of many different criteria examined by Gerogiannis et. (2010:368), Wei and Wang (2004:162), Jaafari and Manivong (1998:252). This specific mix of criteria was selected to support the functions of the decision-making tool. After a broad perspective of PMIS was obtained, it was possible to expand the main criteria into sub-criteria, by using the background knowledge acquired in the literature study.

The expansion of the main criteria resulted in fourteen sub-criteria that had to be evaluated by the decision-making tool. This is a large number of criteria. After considering many alternative multi-criteria decision making processes it was decided that using Analytic Hierarchy Process (AHP) method would be the most suitable approach for developing the decision-making tool. An introduction to this process was

Expert opinion and

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3 obtained in Operations Research 344. Further research into the methods allowed for Excel sheets to be set up to perform the pairwise comparisons necessary in the AHP approach. The importance of the criteria relative to each other could then be determined, as well as comparisons made of user-specified software packages relative to each criteria. Finally, through matrix multiplication, the software packages could be ranked.

Before the Decision-making model was finalized, the preliminary model was presented to experts in the project management environment for evaluation. They were asked to use the tool and comment on the efficiency and accuracy of the output. Their feedback was used to improve the final tool. This step is critical, as acceptance by experts at the development stage should improve the chances of this tool being accepted in organizations.

The expert opinions were analyzed and, where possible, alterations were made to the model. The methods and processes used to develop the tool were documented. Documentation of the entire development process is very important, for both future users, and developers to use as building block in improvement.

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Research the Project Managment Environment and

Management Information Systems

Define the criteria necessary in

evaluating and selecting a PMIS

Document the Decision-

making Tool

Expert opinion and

evaluation

Analytic Hierarchy

Process(AHP)

Research the Project Managment Environment and

Management Information Systems

2. The Project Management Information System (PMIS)

The first phase of the methodology used to develop the decision-making tool was to focus on the existing literature covering both the project management environment and the Management Information System (MIS). Various authors have investigated these fields and the development process benefitted from their immense knowledge.

2.1 The Project Management Environment

Projects can be seen as unique temporary endeavours in which multifunctional and multidisciplinary teams work together to collaboratively accomplish tasks within the agreed constraints of time, cost and quality (Cicmil, 2005:157). They are delivery vehicles for products and services in a global economy (Jackson, 2008:329). A project is composed of many activities, that each have to be described in terms of a completion time, areas it will influence, persons responsible, goals, resources necessary, input/output requirements as well as organizational constraints that might influence it. Many different teams and resources are involved in a project, resulting in a large amount of information flowing between the teams.

Information is seen as a resource (Kendall, 2011:29). It is often of greater use when integrated with other pieces of information though. This is also true for the project environment, where there is a great

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5

INITIATING

Define &

authorise

the project

PLANNING

Define &

refine

objetives;

plan course

of action

EXECUTING

Integrate

people &

resources to

carry out

plan

MONITORING &

CONTROLLING

Measure &

Monitor

progress to

identify

variances

CLOSING

Formalize

acceptance

& bring

project to an

orderly end

need for integration of activities between the different organizational units and different role-players on different levels of the project. This integration can only take place through sharing of information between parties. During a project, documents are produced and transmitted instantaneously to support a real-time representation of the current project status (Nicoletti, 1998:115). Since all activities are running concurrently, projects will not permit face-to-face interaction and as a result, information flows generated by information technologies are utilized to increase efficiency. Information flows should be consistent, accurate and ready for submission due to the urgent nature of projects.

Companies often take on a diverse range of projects at the same time. All of these projects are composed of many functions that have to be performed, and in some cases, these functions have sub-functions. Keeping track of all the associated functions and elements is the role of the project manager. Project management can be seen as the application of knowledge, skills, tools and techniques to tasks to meet project requirements. The Project Management Institute (PMI) identifies processes through which the project manager can manage the project to completion (Project Management institute 2004). They include initiation, planning, executing, monitoring, controlling and closing (Figure 3).

Defining the project scope is the initiating step. This enables boundaries to be established and identifies people, processes, and resources to be involved in the project. At this stage, information gathered from previous as well as current projects, guide management teams in decision-making (Amami, 1993:26). Proceeding from the planning phase to the executing phase, all the objectives and goals set by the Figure 3 - Project Management Process groups SOURCE: Project Management Institute, 2004, p.40

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6 management team have to be accurately communicated to all role-players, inside and outside the organization/ project space. Work in the project is broken down through a Work Breakdown Structure (WBS), allowing for the sorting of information by engineering and design area, major techniques, priorities etc. Only after this has taken place, integration between the functions can commence. Data is then integrated from different sources and in different formats. Information, as the driving force of the project, is stored in an interactive database allowing project managers to access it when needed. This information (in the form of text, graphs and networks) can then be used in planning, communicating, scheduling, budgeting and procuring resources. The real-time analysis of projects is in focussing on critical factors relating to the project.

It is essential to monitor the progression of the project as well as formalise closing procedures as the processes in Figure 3 indicates Performance indicators & measures must be communicated to different functional units, who can in turn, monitor the progress and investigate & clarify variances. All information generated here should be stored in a database to benefit future project management.

In conclusion, it is clear how project management can benefit from an information system. Data from previous projects can be utilised to highlight the interdependence of tasks and roles in decision-making.

2.2 Management Information System (MIS)

Information Systems (IS) can be seen as a combination of hardware, software, infrastructure and trained personnel organized to facilitate the handling of data (Business Dictionary, 2011).

Most businesses have one or more IS in place: transaction-processing systems, process control systems, office automation systems, management IS, decision support systems or executive IS (Kendall, 2011:30). These types of systems were already implemented in the 1960s, but at the time, access and usage thereof were limited to a small number of wealthy companies. Today, in an age of globalized communication and control, computers are a part of everyday work. The World Wide Web has granted individuals and companies easy access to a wide range of information.

Each of the above IS provides specific information in the organizational context. In most cases, the specific information needs to be shared with other agents. Like any valuable resource, it is of critical importance that the information flows between role players are managed effectively and that control be

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7 exercised over it. The integrated management information system (MIS) fulfills this function (Davis, G.B. 2000).

By using a MIS, data can be gathered quickly from sources both internal and external to the organization. The data can then be processed, integrated, and stored in a centralized database. This allows for the generation of real time feedback in the form of reports to management and other role players; updating of information; and easy access to information for authorized individuals (Business Dictionary). The MIS ensures that data messages are exchanged efficiently among the different IS and eliminates the need to visit separate systems to obtain comprehensive information.

This centralization and consistency of data decrease the occurrence of redundant data being stored (Qirui, 1993:285). The MIS creates an environment where hierarchical, functional, and individual actors receive support in the decision-making process. Merging information from a variety of sources/functions/departments, allows the formulation of a more objective view of the decision situation. It also enables creative ideas, which might improve the decision ultimately made by the user and management (Nutt, 1986:153).

2.3 Project Management Information Systems

In the 1990s globalization and increased competitiveness in the business environment led to shifts in business management and ways of thinking. As projects were seen as vital to the performance and the survival of companies, there was an increase in the number of projects undertaken. Delivering these projects on time, within budget, meeting all customer specifications and still managing risk was what was required of project managers on a regular basis. To control the increased uncertainty and complexity of projects, the need for project management became apparent. But keeping track of information on all the different tasks in a project life-cycle, the different role-players performing them, resources involved, cost and budgets to be scheduled as well as finding a way to keep all stakeholders satisfied, is extremely difficult. Wastage in projects could frequently be traced back to less than optimum information handling and exchange. The information was inadequate, inaccurate, inappropriate, inconsistent, late or a combination of these (Stewart, 2004:470). This is worrying as information received affects the managers’ perceptions of the project task and related work environment. It might also affect their actions and performance in future tasks.

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8 The success of companies was measured by their project management capabilities and companies had to utilize all resources to remain competitive. The PMIS was one of these resources (Snyder, 1985:74). PMIS can be seen as important building blocks in project management. The PMIS is valuable to project managers, improving their effectiveness and efficiency in managerial tasks. In addition, increased productivity and timelier decision-making has also emerged because of the use of the PMIS (Snyder, 1985). These systems have changed from MIS only focussed on scheduling and resource management, to wide-ranging systems supporting the entire life cycle of projects, programmes and portfolios. They take into account the unstable and complex nature of the project environment, as described above, and provide management with the ability to detect warning signals and take early corrective action (Snyder, 1985:73).

Timely management of information flows enables the project manager to control activities during the project life cycle. Through situational information, decision makers gain a broader understanding of what exactly is going on in the project and are then more inclined to act on insights gained (Bendoly, 2007:617). With the monitoring of the execution of activities, unwanted situations can be avoided by planning and implementing corrective actions, as in many cases the information that is generated by one activity, generates information flows in other activities. With each project being original and differing substantially from others, there is always the potential for innovation, uncertainty and risk (Turner, 2000:66). “The importance of information is directly proportional to its improbability”, as Jerry Pournelle the American science fiction writer stated (Pournelle, s.a.). Thus the more uncertain a situation, proposal or idea, the more important it is to gather information to support or explain it. The integrated project management environment described above constitutes one of these uncertain environments. This shifting environment calls for a large amount of information. Investment in a PMIS that increases information visibility is therefore very valuable.

If the on-site information that is shared can be improved to always represent the correct status of the occurring problems in activities, integrate relevant project information and satisfy the demand for activity evaluation, project success would increase significantly (Tsai, 2009:323). A PMIS, as an information manager, integrates and controls information flows to assist management in gaining an overview of the organisation. It stores information in centralized databases and allows the generation of documentation in a form that the users desire. A survey done by Raymond & Bergeron (2007) investigated the elements contributing to the impact of the PMIS on project success. Even though the PMIS itself did not directly influence the system, the use thereof was shown to make a positive

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9 contribution to the success of the project. PMIS quality was found to be a strong predictor of information quality obtained from the system, with available, reliable, precise, comprehensive and secure information being the result of a high-quality PMIS.

The need for the PMIS has enabled it to progress significantly from the 1990s to today. Software development techniques and resources have improved and as a result, the quality of the systems in the 20th_{century is of high standards. There are a variety of packages available, each with different features}

and specifications.

2.4 Current PMIS software available

PMIS currently employed in the project environment are one of three types: Commercial-off-the-shelf software, custom developed in-house software or web-based project management systems. When commercial software doesn’t meet the specific requirements of an organisation, some firms will often develop their own software in-house. Web-based systems are becoming increasingly popular as they are readily available from any location, and there is no initial purchasing cost. The list of PMIS currently available (Table 1) is just a small portion of the actual PMIS available. Developers are continuously improving previous versions or creating interfaces between different software packages, therefore it is difficult to obtain and exact list of all software packages available.

Table 1 - PMIS currently available (Commercial & Web-based)

PSNext PeopleSoft Enterprise Program Management

Project Insight: Web based Project

Management Software Primavera P6 Enterprise Project Portfolio Management Projectron BCS 6.2 Oracle Projects: Oracle Project management

AMS REALTIME Projects Acumen Fuse

project.net AstaPowerproject

easyprojects.net Deltek Enterprise Project Management: Cobra

Workplan Dekker PMIS

Minute Man Project Management Software iPlan Project Management

Jonas Software: Project Management Panview: Project portfolio management

Micro Planner: X-Pert Artemis: Views

MS Project 2010 ]project-open[ OSS Project Management

Omniplan

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Research the Project Managment Environment and

Management Information Systems

Define the criteria necessary in

evaluating and selecting a PMIS

Document the Decision-

making Tool

Define the criteria necessary in

evaluating and selecting a PMIS

3. Decision-making criteria for PMIS selection

The research in the previous section gave insight into the value of PMIS in an organization. It highlighted some of the many roles the system plays. As the decision-making tool supports project managers in choosing the right PMIS, the tool had to be based on the right criteria. With a comprehensive PMIS in mind, various articles that explore these criteria and the reason for their importance were analyzed.

Gerogiannis (2010:368) identifies technical, managerial and organizational needs as important for an organization. Similarly Wei and Wang (2004:162) select the strategic ability, technical requirements, vendor support, change management- and project management methodologies as aspects companies usually consider. Jaafari and Manivong (1998:252) focus on real time management functions, processing and reporting, inter-operability and compatibility, information integration and information management in the capability requirements of a PMIS. All of these criteria were considered, and the final criteria were selected in such a way that they cover the majority of the above-mentioned criteria and more. The main criteria for the decision-making tool were selected as technical requirements; organizational requirements; as well as the software acquisition requirements of the organization.

Each selection criterion was investigated and refined into criteria. The main criteria and the sub-criteria, as well as the reason for their selection, are discussed in detail below.

Expert opinion and

evaluation

Analytic Hierarchy

Process(AHP)

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3.1 Technical criteria

The technical requirements of a PMIS should be associated with the project management functions that have to be performed by the software package. As the project management environment is so broad, with so many requirements, it was decided to evaluate different project management methodologies in order to identify the one methodology most inclusive of the required project management functions. These functions are an integral part of the PMIS.

In the investigation process it became apparent that many project management methodologies exist, including Prince, PMBoK, Scrum and many more (Alleman, 2002). These methodologies document and define the different areas that are critical in project management and describe how to go about successfully completing a project using specific tools and methods. Some of the definitions encompassed by these methodologies overlap, but each methodology has a unique approach. Each of the methodologies has its advantages and disadvantages, but their most important feature is that the processes and methods they include cover the majority of the life cycle of the project. It can therefore be stated that they lead the project team from the project initiation stage, through to the closing stage, to deliver what the client wants. A consulting team from North American company – KLR Consulting- describes the PMBoK (Project Management Body of Knowledge) - and PRINCE2® (Projects IN Controlled Environments) methodologies as the strongest contenders among the countless choices of methodologies (Selecting the right project management methodology, s.a.). In Table 2 these methodologies are compared (PMI Westchester Chapter, 2004). Warrilow (2009) also describes these two methodologies as most popular of eight methodologies.

Table 2 - PMBOK compared to PRINCE 2 Project management methodologies

PMBOK PRINCE2®

Comprehensive Focus on key risk areas only; doesn’t claim to be

complete

Largely descriptive, prescriptive on a high level Highly prescriptive, especially on Process Structure, but adaptable to any size project

Core and facilitating processes; need to be scaled to

needs of project All processes should be considered; also need to be scaled Customer requirements driven Business case driven

Sponsor and stakeholders Clear project ownership and direction by senior management

US/ International standard UK standard

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Project integration

Project

Scope Project Cost Project Time Quality Project Project Human Resources Communication Project Project Risk Procurement Project

For the technical criteria to be used in the decision-making tool, it was necessary to choose between these two methodologies that would be the foundation. As Table 2 above shows that PMBoK is more comprehensive, based on international standards of the PMI and customer focussed. On the other hand, PRINCE2® is focussed on business cases and it includes all processes, not merely the core and facilitating processes like PMBoK. Gerogiannis (2010:363) mentions a market analysis on Project and Portfolio management information systems that found that most PMIS try to offer support for all the areas described in PMBoK. This prominent focus on PMBoK, together with the basic knowledge of it obtained in the Project management 412 Course, made it the choice of reference in this report.

The PMBoK methodology comprises process and knowledge areas describing the sum of knowledge encompassed by the project management profession. It illustrates knowledge unique to the project management environment that overlaps with other management disciplines. The information in the PMBoK is a generally accepted as best practice, but not uniformly applied to all projects (Project Management Institute, PMI). Thus, a PMIS covering this body of knowledge would be able to effectively manage almost all projects.

Figure 5 and Table 3 below was taken from the PMI’s latest edition of “A guide to the Project Management Body of Knowledge”. This matrix of the project management process groups and the project management knowledge areas is a good indication of what the PMBoK methodology includes. The nine knowledge areas described in table 3 can be seen as a definition of the different components present in a project. All areas are interrelated and not optional, and all are present in each project to different extents. Consequently, the nine knowledge areas were chosen as the first set of criteria – the technical criteria. What each area entails will be discussed in detail below.

Figure 5 - Nine PMBoK Knowledge areas SOURCE: Project Management Institute, 2004

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13 Table 3 - PMBOK knowledge areas and processes

Project Management Process groups

9 Knowledge

Areas

Initiating

Planning

Executing Monitoring &

Controlling

Closing

Project

Integration

Management

Project Charter; Preliminary Project Scope statement Project Management

Plan Direct and Manage Project Execution Monitor & Control project work; Integrated Change control Close Project

Project Scope

Management

Scope plan; Scope definition; Create WBS Scope verification; Scope control

Project Time

Management

Activity definition; Activity sequencing; Activity Resource estimating; Activity Duration estimating; Schedule development Schedule Control

Project Cost

Management

Cost estimate; Cost Budget Cost Control

Project Quality

Management

Quality planning Perform Quality Assurance Perform Quality Control

Project Human

Resource

Management

Human Resource

Planning Acquire & develop project team Manage Project team

Project

Communications

Management

Communications

planning Information distribution Performance Reporting; Manage Stakeholders

Project Risk

Management

Risk Management planning; Risk identification; Qualitative risk analysis; Risk response planning Risk Monitoring & Control

Project

Procurement

Management

Plan purchases & acquisitions; Plan contracting Request Seller responses; Select Sellers Contract

Administration Contract Closure

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3.1.1 Project Integration Management

Integration is defined as the processes and activities needed to integrate the various elements of project management, which are identified, defined, combined, unified, and coordinated within the Project Management Process Groups (Project Management Institute, 2004). The project environment has already been identified as an environment that covers many departments, functions, systems and activities, and therefore integration management is necessary to attain close coordination between all these areas.

Integration management is a central function of project management, and as can be seen from figure 5, this knowledge area incorporates all others. It is the only knowledge area with processes to be performed in each process group (Table 3). A project manager might see the integration of a whole project as a daunting task, but the processes included in this knowledge area can be seen as enablers for project managers. The processes allow them to keep a broad overview of the project and its strategic focus, as a result not losing sight of the detail of single activities to be performed.

Integration creates an environment that supports decision-making on where to concentrate resources and skills on a daily basis. With the big picture in mind, project managers can make trade-offs among competing objectives and alternatives, and also anticipate potential issues and deal with them while they are manageable (e-ProjectCoach, 2006). The PMBoK highlights three processes critical in integration management: (Project Management Institute 2004)

• Project Plan Development: integrating all project plans to create a coherent document

• Project Plan Execution: performing the activities included in the project plan & developing alignment among the major stakeholders

• Overall change control: coordinate changes across the entire project

The inclusion of these processes in PMIS software is important. The software should also integrate the work done in the project with the on-going organizational work, including the deliverables received from the different functional areas in an organization.

3.1.2 Project Scope Management

Scope management includes processes that control the project scope. A scope statement is set up to establish the constraints of the work required to complete a project successfully. It positions project

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15 boundaries within which the processes and activities in the project can interact (Darnall, 2001). Included in the scope statement is a Scope of Work (SOW) document that divides tasks into smaller activities. By doing this the project manager and project stakeholders can develop and maintain a common understanding of what products or services the project will deliver. Scope management in a PMIS should include the following processes: (Project Management Institute, 2004)

• Initiation – the authorization of the project/ a phase

• Scope Planning – The development of the detailed scope statement

• Scope Definition – Subdividing project tasks into more manageable components (SOW) • Scope Verification – Formalizing the acceptance of the project scope

• Scope Change Control – Controlling changes to the project scope

Historical information about previous projects (errors, omissions etc.) should be considered during the scope definition. The PMIS should therefore have a suitable database for the storage of information on previous projects.

3.1.3 Project Time Management

The time management knowledge area incorporates all the actions required to ensure that projects are delivered in a timely manner. The development and management of a project schedule that will complete the project on time is a primary responsibility of the project manager. This plan should be realistic and it should be effectively managed (Darnall, 2001). The Project Management Institute states that time management on a project should be broken down into the following processes:

• Activity definition – Identification of specific activities to be performed for project completion, usually done through a Work Breakdown Structure (WBS)

• Activity sequencing – Identification & documentation of dependencies between activities • Activity duration estimation – Estimating time required to complete individual activities

• Schedule development – Creating a project schedule by analyzing activity sequences, durations and resource requirements

• Schedule control – Controlling deviations from the schedule

Project management software, like the PMIS, is widely used to aid in schedule development and control. The mathematical analysis of the plans, as well as the balancing of resources over different activities is

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16 automated in these products. The software allows the visualization of the plan and the tracking of planned and actual dates, thus enabling the project manager to immediately adapt to schedule deviations. Project files, commercial duration estimation databases, as well as project team knowledge should be incorporated into the database of the PMIS, as with project scheduling, forecasting can be made from this information (Project Management Institute, 2004: 65)

3.1.4 Project Cost Management

Project cost management consists of the processes required to ensure that the project is completed within the approved budget. This is done by the setting of cost constrains and by establishing estimates for costs and resources (Egeland, 2011). The costs considered in the budget cover all aspects of the project - from staffing to equipment and software. Third-party services like subcontractors and miscellaneous expenses are also considered. The budget is however not the only aspect cost management is concerned with. The following processes all fall under cost management: (Project Management Institute, 2004)

• Resource planning— Determining what resource needs & quantities are necessary in the project • Cost estimating— Developing an estimate of the costs involved for these resources

• Cost budgeting— Allocating the overall cost estimate to individual work activities • Cost control— Controlling cost deviations and taking corrective action against trends

Similar to project scheduling, project management software (like the PMIS) is often used to track planned costs vs. actual costs relative to the progress of work, and to simplify the calculation of cost estimates to complete the work. The structured and standardized approach followed in the software also provides an unbiased view of the cost situation in the organization, whereas different stakeholders may measure cost in different ways and at different times. The PMIS should make information available to everyone in the same format. The accuracy of the budget is directly proportional to amount of information available to the team (Darnall, 2001). Historical information regarding the types of resources required for similar work on previous projects should be made available to allow teams to make accurate estimates.

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3.1.5 Project Quality Management

Projects are always undertaken to fulfil a certain need. Quality management processes are performed to ensure that the project satisfies these needs and meets its quality requirements. Overall project performance is measured, and project results are monitored and compared to the quality standards set out in the project-planning process, to ensure customer satisfaction. Processes necessary are (Project Management Institute, 2004):

• _{Quality planning— Identifying relevant standards and determining how to satisfy them}

• Quality assurance— Evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards.

• Quality control— Monitoring specific project results to determine if they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance. By building quality checkpoints into the project schedule, the project manager can monitor the level of quality throughout the delivery using software like the PMIS. An important function performed by a package like this would be a cost/benefit analysis to guide trade-offs and compromises. Quality cannot be over emphasized in any environment.

3.1.6 Project Human Resource Management

In this knowledge area, a strategy is created for attracting, selecting, motivating, and managing all the people involved in the project, from the delivery team to the stakeholders and sponsors. The processes involved form an organizational structure that can make effective use of all the people involved in the project. Each individual in the team requires the use of different communication styles, leadership skills, and team-building skills, which makes it very difficult for the project manager. Human capital management enabling processes include (Egeland, 2011):

• Organizational planning— Identifying, documenting, and assigning project roles, responsibilities, and reporting relationships.

• Staff acquisition— Getting the needed human resources assigned to and working on the project.

• Team development— Developing individual and group skills to enhance project performance.

Combining all of these processes into one software package could improve the efficiency of the employees and, as a result, also the quality of the work they perform. Access to information on all

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18 participants will provide the project manager with an accurate view of the team s/he is working with. S/he would be able to see where the team is lacking functional and/or process expertise, and what the reasons are for a possible decline in performance. Keeping a database of workers and their performance will also enable project managers to assemble a diligent team with sufficient skill for the next project.

3.1.7 Project Communications Management

Communication management is not merely the day-to-day skills used by management to communicate. Rather, it can be seen as the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. These processes seek to ensure that all project information including project plans, risk assessments, meeting notes, and more are collected, documented, and distributed to the appropriate stakeholders. Keeping stakeholders and sponsors informed and involved throughout the life of the project are key success factors. Communication takes at least 90% of a Project Manager’s time and it consists of: (Project Management Institute, 2004)

• Communication planning— Determining information and communication needs of stakeholders • Information distribution— Making needed information available to project stakeholders in a

timely manner

• Performance reporting— Collecting and disseminating performance information through status reporting, progress measurement, and forecasting

• Administrative closure— Generating, gathering, and disseminating information to formalize phase or project completion

The rapid growth of technology has led to an increase in communication technologies available. A variety of compatible devices, software, service providers, and global communication in different time zones can result in an information overload (Hitt, 2009). For this reason planning and managing the communication in a project, to ensure that only necessary information is distributed, is of critical importance in a PMIS.

3.1.8 Project Risk Management

Project Risk Management can be seen as the processes concerned with identifying, analyzing, and responding to project risk. Projects often fail because of failure in assessing and preparing for risks. As

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19 projects are complex environments, project managers are expected to look beyond the technical to the organizational and external environment. They then have to maximize the probability and consequences of positive events and minimize the probability and consequences of adverse events to project objectives. A platform to evaluate such situations is formed by combining the following processes: (Project Management Institute, 2004)

• Risk management planning— Deciding on the approach to and planning of risk management • Risk identification— Identifying likely risks that might affect the project as well as their features • Qualitative risk analysis— Performing a qualitative analysis of risks and creating conditions to

prioritize their effects on project objectives

• Quantitative risk analysis— Measuring the probability and consequences of risks and estimating their implications for project objectives

• Risk response planning— Developing procedures and techniques to enhance opportunities and reduce threats from risks to the project’s objectives

• Risk monitoring and control— Monitoring residual risks, identifying new risks, executing risk reduction plans, and evaluating their effectiveness throughout the project life cycle.

Organizations will often combine several of these processes into one process with the main purpose of identifying all the risks and developing responses for those with the greatest consequences to the project objectives as quickly and efficiently as possible. Planning for risk early on in the project and putting mitigation measures in place could save a project from premature termination (Darnall, 2001). Project managers are required to educate and reassure their teams (and clients) about the risk processes and help them understand that risk management is an essential element of any project area. The PMIS could be an enabler in this regard.

3.1.9 Project Procurement Management

Procurement can be defined as the acquisition of goods and services from outside the organization. Procurement management is the art of soliciting those goods and services, selecting the best provider and material, and ensuring that contracts are drawn and enforced fairly and effectively. The project manager is the buyer of the goods or services from a supplier or contractor, and the following processes are examined from this perspective (Egeland, 2011).

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• Solicitation planning—

D

ocumenting product requirements and identifying potential sources

• Solicitation— Obtaining quotations, bids, offers, or proposals, as appropriate

• Source selection— Choosing from among potential sellers

• Contract administration— Managing the relationship with the seller

• Contract closeout—completion and settlement of the contract, including resolution of any open items

Projects under good management can sometimes fall behind because of external service providers or product availability performing below the required standards. Therefore keeping record of actions, tenders, vendors and all elements present in procurement management is crucial. These functions can be performed by a PMIS.

In conclusion, the knowledge areas discussed above, especially the detailed understanding of what they entail, are essential to every project manager. They have been accepted by the Project Management community, and for this reason they are acknowledged as comprehensive criteria for evaluating the technical requirements of a PMIS.

3.2 Organizational criteria

The technical criteria discussed in the previous section are of vital importance to project managers when choosing a PMIS. These criteria also create a platform for software developers to start from when developing new packages and systems. Despite the inclusion of these technical features in a package, there must be commitment to the system on the part of the user (Snyder, 1985:74). All the planned advantages and improvements the PMIS could provide to the organization are of no use if the software package is not used. For this reason, the correct approach to the people inside the organization is equally important in any PMIS.

Gerogiannis (2010) suggests the application of a technology acceptance model to support an organization in setting up the new software package. This model explores the relationship that exists between a system’s usefulness and its ease of use. The two factors highlighted by this model – perceived ease of use and perceived usefulness - can serve as the organizational criteria in die decision-making model. This will allow project managers to select a PMIS with high probability of acceptance by the rest of the members of the organization.

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21 Behavioural Response Affective response Cognitive response External stimulus

External

variables

Perceived

usefulness

Perceived

ease of use

Attitude

towards using

Actual System

use

3.2.1 The Technology Acceptance Model (TAM)

Fishbein & Ajzen (1975) developed the Theory of Reasoned Action (TRA) in the social psychology literature. This theory suggests that the attitude towards behaviour (decision-making) is determined by beliefs about the consequences of the behaviour and the effective evaluation of those consequences. Since 1975, many specific models have been derived from TRA. The technology acceptance model (TAM) developed by Davis (1993) is one of them, focussing more on information technology.

TAM addresses the reasons why users accept or reject information technology, and it diagnoses design problems before users have experience with a system. Davis emphasizes that user acceptance is a pivotal factor in determining the success or failure of any information system project. The model hypothesizes that the actual use of the system is determined by the attitude a user has towards using the system. This, in turn, is a function of perceived usefulness and perceived ease of use. Perceived ease of use also has a causal effect on perceived usefulness. Both of these beliefs are however originally influenced by the actual design features, or external variables as can be seen in Figure 6 (Davis, 1993).

Lack of acceptance from users is a barrier to the potential success of a software package. PMIS endeavour to improve the current organizational structures and performance, but this attempt is lost if the package isn’t accepted and implemented in the organization.

Davis (1993) defines perceived usefulness as “the degree to which an individual believes that using a particular system would enhance his or her job performance”. The user judges the efficiency of the system, even before usage and what the model indicates is that the user will still use the system even though he/she might not like it, simply because it will possibly increase job performance. On the other SOURCE: Davis, 1993:476 Figure 6 - Davis's Technology Acceptance Model (TAM)

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22 hand perceived ease of use is defined as the "the degree to which an individual believes that using a particular system would be free of physical and mental effort" (Davis, 1993). The causal effect of perceived ease of use on perceived usefulness indicates that a user will always choose the system that is “easiest” to use, despite the fact that they might have identical functionality. This is understandable and beneficial to the organization as the user will become more productive with his/her usage of the “easier” system and as a result will improve overall performance. In the process of validating the TAM, Davis found a stronger relationship between perceived usefulness and the attitude toward behaviour than between perceived ease of use and attitude toward behaviour. The reason for this was the “mediation role” perceived usefulness plays between perceived ease of use and the attitude towards using (Dillon A, 1996).

Perceived usefulness and perceived ease of use have been selected as the organizational criteria in the decision-making tool. Their significant impact on a user’s attitude toward the system is defined as feelings of favourableness and impartiality toward the organization’s decision on whether they will use the proposed package. By including these factors in the tool, an honest opinion of how the tool-user evaluates the package will be obtained. Authority alone cannot be used as a motivational factor to ensure technology is being used, but focussing on these two factors at least render predictability of acceptance to some extent (Dillon, 1996).

The tool is currently primarily for project manager use, which might limit the insights gained by these two criterions. In the case of the tool being available to the lower levels in the organization - the people that will actually use the tool - a clearer representation of the user perceptions could possibly be obtained. The reality is that the employees on a lower level won’t necessarily have the specialized knowledge to utilize the rest of the decision-making tool. Future improvement of the tool should take this into consideration when putting together the criteria. Improvements could possibly include trade-offs between the criteria or different tools for the different levels of management in the organization.

3.3 Software acquisition criteria

The technical and the organizational criteria have been defined and the reasons for choosing the nine knowledge areas and perceived usefulness and ease of use have been stipulated. From a management viewpoint both of these categories are very important, but a crucial area that can be seen as the “make or break” of decision-making in many cases is the costs implications. Whether it is annual planning or

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23 software acquisition, like in this case, a considerable amount of time is always allocated to budgeting or analysing financial statements etc. To ensure the decision-making tool provides an accurate representation of all factors present in software acquisition decision-making, it was decided to investigate the total costs of ownership (TCO).

3.3.1 Total Cost of Ownership (TCO)

Total cost of ownership (TCO) is more than just the initial purchasing price of the product/service. It is the present value of all costs incurred from purchase to disposal, including repair, insurance, training etc. (Schmidt, 2011). While the most expensive system at the decision point might meet most of organizational requirements, the TCO over the life cycle of the system also has to be taken into account. Similarly choosing the least expensive package, because of the emphasis on initial costs, might lead to implementation risks and low functionality. By rather utilizing a TCO analysis, informed financial decisions can be made.

Elements included in the TCO analysis can be specified according to the particular needs of an organization and the requirements that they wish to include. Open Options, a product of the Northwest Regional Educational Laboratory (2005), defines price, opportunity costs and other costs to be the factors included in the TCO analysis when choosing between open source and commercial software. Another example is the analysis done by Gartner Inc., an information technology research and advisory firm, who made the estimates, as reflected in Figure 7, for actual cost of equipment for wireless pervasive connectivity.

Source: http://davidhoglund.typepad.com Figure 7 - Actual cost of equipment for wireless connectivity

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24

Total cost of

ownership

(TCO)

Software cost Software functionality Software Architecture & Scaleability Time to Implement User training Support & Maintenance Data architecture Hardware cost

The TCO analysis for information technology generally includes the elements in figure 8.

3.3.2 Weighted TCO element importance

As the organization will eventually perform a TCO analysis in the process of software acquisition, it was decided to include criteria in the decision-making tool that would ultimately provide analysts with the weighted importance of different elements in the TCO analysis to support their calculations.

The final weighted importance of the functional criteria, in section 3.1, can provide the relative importance of the software functionality, software architecture and Scaleability and data architecture - elements of TCO. If, for example, the functional criteria were weighted much higher than the organizational criteria in the calculations, management would then know that the TCO costs related to the functional characteristics of the software package would be more than the costs relating to the “selling of the package to the company” in the long run. Budgets can be updated accordingly and management will then have a better idea of the possible benefit the package could provide.

Compressing the TCO elements in Figure 8, in the category of software acquisition - software cost, maintenance & support, and implementation & training were chosen as criteria. Software cost was defined as the actual purchasing cost associated with the new acquisition of the package/system, Source: Allied data technologies, 2008 Figure 8 - Total Cost of Ownership (TCO)

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25 including additional hardware costs. These costs are usually stipulated in documents provided by the various competing vendors; otherwise, it should be made available to the organization. Maintenance & support covers the service provision from the vendor required by an organization. This often includes a service plan or guarantee, and a customer service department. Finally, implementation & training includes the initial start-up support provided by the vendor, comprehensive training sessions and complete user manuals. By evaluating the importance of these factors, and actually obtaining a numerical weight, companies will have a better perspective when having to choose between competing software packages.

From this section, it should be apparent that none of the criterions was chosen without a clear understanding of the environmental requirements. Each main criteria group covers a specific area important in the project management environment. It should however be said that this tool by no means covers all possible criteria, and as a result might be found lacking in some areas. For the purposes of this report however, it was necessary to limit the endless possible areas that may be evaluated to the final criteria.

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26

Research the Project Managment Environment and

Management Information Systems

Define the criteria necessary in

evaluating and selecting a PMIS

Document the Decision-

making Tool

Document the Decision-

making Tool

4. Decision-making Tool for Project Management

Information System (PMIS) Selection

4.1 Analytic Hierarchy Process (AHP) in the evaluation and selection of

Project Management Information Systems

The fourteen criteria selected in the previous section together form the foundation of the decision-making tool. This is quite a large number of criteria to evaluate. An approach to decrease this number was developed by Ceberio (2011). Their approach attempts to reduce the decision space by building preference constraints (according to customer requirements) and then using standard techniques to solve the problem. This relatively new method aims to decrease decision-making time and increase accuracy. It has however not been sufficiently validated to date, and for that reason can’t be utilized to decrease the selected criterions. It was therefore necessary to explore multi-criteria decision-making methods.

Numerous multi-criteria decision-making (MCDM) methods were explored to decide on the best approach to include in the decision-making tool. Most MCDM tools are based on utility theories. These theories assign a utility value, between U [0, 1], to each criterion. Utility based approaches to MCDM include using the Maximax & Maximin approaches, weighted sum approach, and Non-additive approaches. The Maximax and Maximin approaches only consider a single criterion, the absolute

A decision-making tool for the evaluation and selection of Project Management Information System (PMIS) Software

Final year Project: Final Report